CBN, NSC Introduce Disbursement Account For Shipping Agencies

The Central Bank of Nigeria (CBN) and the Nigerian Shippers’ Council (NSC) are currently collaborating to compel all shipping agencies to open Disbursement Accounts (DAs) from where they will carry out operational costs for their multinational principals overseas. The apex bank and the ports economic regulator said this was in line with Article 4 of the UNCTAD minimum standards for shipping agents all over the world.

The Executive Secretary, NSC, Mr Hassan Bello explained during a meeting between the CBN representative and shipping industry stakeholders in Lagos that maintenance of a disbursement accounts as provided by ‘UNCTAD Minimum Standards for Shipping Agents’ stops the agent from going to the local market to source foreign exchange to settle charges incurred by the vessel locally. Bello who was represented on the occasion by the Director, Legal Services of the Council, Mr Samuel Vongtao, identified such charges to be covered by the DAs as those collected by the Nigerian Ports Authority (NPA); Nigerian Maritime Safety and Administration Agency (NIMASA); ship chandelling costs and other local shipping costs.

Bello said such charges were usually in foreign exchange since “it is assumed that the principal must have wired the funds to the disbursement of account of the agent in foreign exchange”. According to him, it was left for the agents to make such payments in currency that was transferred to the disbursement account rather than going to the interbank market to source for foreign exchange”. He said that it was wrong that in Nigeria, the practice was completely different, adding that “shipping agents apply to transfer all incomes to their principal while at the same time applying to Central Bank of Nigeria (CBN) for Forex at interbank market to service local costs”.

Bello expressed delight that the CBN which attention has been drawn to this vacuum by the Council had responded by setting up Investigative Teams that went to all banks and positively ascertained that there was not a single type of such account being operated by any Shipping Agency in the Country.

The CBN Deputy Director, Foreign Exchange Management, Trade and Exchange Department, Mr. A.S. Jibrin said the idea of the meeting with the stakeholders was to ensure that the DA enjoys the support of those in the shipping industry. Jibrin explained that what the CBN set out to do was to listen to the stakeholders on the DA, and added that the apex bank was interested on policies that will grow the shipping industry and the national economy. He said decision on the policy could not have been taken without hearing from those in the industry. Jibrin said he was happy about the consensus opinion being expressed at the meeting that the Disbursement Account should be introduced.

A former Director, Shipping Services of NSC, Mrs Dabney Shall-Holma said the Disbursement Account when introduced will go a long way in improving the contributions of the shipping sector to the country’s gross domestic product (GDP). Shall-Holma while noting that the shipping sector was nearly absent or too low in terms of GDP contribution said it was not good that shipping operators were not contributing enough to the economy. During the meeting, stakeholders were dismayed that DA is yet to be introduced in the country considering the time that the idea came up. Participants said that the CBN and the NSC should move as fast as possible to ensure that the policy takes effect in Nigeria.

Among those who spoke in favour of having the DA in place were founder of National Association of Government Approved Freight Forwarders (NAGAFF), Dr Boniface Aniebonam, President of Association of Nigerian Licensed Customs Agent (ANLCA), Iju Tony Nwabunike, a member of the Nigerian Economic Group, Dr Ikenna Nwosu, President of Nigerian Ship Chandlers Association, Dr, Martins Enebeli, former President of NAGAFF, Dr. Eugene Nweke, among others.

The stakeholders maintained that it was wrong that the shipping agents were sourcing foreign exchange locally to settle NPA, NIMASA and other dues when they ought to have been sent such money from their foreign principals overseas. Aniebonam said that it was even sad that while this was the case, Port and Terminal Multiservices Ltd, (PTML) was collecting illegal fees from customs agents as a condition for allowing customs agents have access into their premises for clearance of goods in their terminals. He said PTML has been boasting of registering 10,000 customs agents who allegedly paid N8000 each for access cards to be allowed into their PTML terminals.

Similarly, Enebeli said Nigeria loses $4billion annually for not introducing the Disbursement Account for all shipping agents. He said such amount can bring about a lot of multiplier effect in the industry and the national economy. It was gathered that the NSC had last year given its position on the DA to the CBN during the review of the new Forex Manual. The CBN had April this year informed the NSC of its acceptance on its position on DA.

The meeting of Tuesday with stakeholders, it was gathered, was to confirm that the Council’s position on the matter “has the buy-in of all stakeholders” so as “to mitigate the impact of the provision on businesses and attendant likely outcry of operators”.

Council officials said that the latest move by the CBN appears to be the best chance to introduce the Disbursement Accounts in line with global best practices in the operations of Shipping Agencies in Nigeria. The meeting involving stakeholders and the CBN, according to the Council, was imperative “to avert any possible outcry of non-inclusiveness, from the industry, when the practice is eventually enshrined in the CBN’s Forex Manual”.

It is expected that the Council will hold similar meeting with stakeholders in Port Harcourt to cover shipping agents in that area.